Construction Costs Up 6.0% in May

July 6, 2021 – Ana Custódio

Material prices and labour costs rose by 5.7% and 6.4%, respectively. According to the National Statistics Institute’s New Construction Costs Index, construction costs rose by 6.0% year-on-year in May.

New housing construction costs are estimated to have increased by 6.0% year-on-year in May, down 0.4 percentage points from April. During the month, material prices increased by 5.7% (vs 3.8% in the previous month), while labour costs were up by 6.4% (10.3% in April).

According to the INE’s analysis, the cost of labour contributed 2.7 percentage points to the increase in the New Housing Construction Costs Index, while the materials component contributed 3.3 percentage points.

Quarter-on-quarter, the new housing construction cost index was up 0.3% in May. The cost of materials increased by 1.8% as the cost of labour fell 1.8%.

The labour and material components contributed 1.1% and -0.8%, respectively, to the monthly change to the New Construction Costs Index.

Translation: Richard D K Turner